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Baltimore mayoral candidates express concern about $535M public financing deal for Port Covington

Mayoral candidates Sheila Dixon and Carl Stokes speak at a debate.
Mayoral candidates Sheila Dixon and Carl Stokes speak at a debate.

Many of the leading candidates to become Baltimore's next mayor expressed concerns Thursday night over the $535 million proposal to provide tax increment financing for the massive Port Covington development.

At a mayoral debate at the Murphy Fine Arts Center at Morgan State University, nine Democrats running for Baltimore mayor expressed at least some degree of skepticism over the plan for the city to contribute hundreds of millions to help finance the redevelopment of Port Covington. That's where billionaire Under Armour CEO Kevin Plank is attempting to transform the peninsula with offices, homes, shopping, restaurants, parks and a state-of-the-art campus for his growing company.

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Under the proposal, the city money would help pay for streets, utilities, parks, and highway and transit improvements for the roughly $5.5 billion project.

"The project meets none of the criteria" for tax-increment-financing, said City Councilman Carl Stokes, whose economic development committee could vote on the deal.  "It's a $300 billion company. It can build its own [infrastructure]. It doesn't need us. If Sandtown, Penn North, Oliver and Broadway East get rebuilt first, then we'll consider it."

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Former Mayor Sheila Dixon also was skeptical, saying the developers are attempting to push through the deal before Mayor Stephanie Rawlings-Blake leaves office in December.

"I went on record today to say it should not go forth under this administration," Dixon said. "A comprehensive plan has to be done. ... If they don't include African-American equity partners, if they don't have a plan to bring back manufacturing the clothes Under Armour produces in other countries, it should not happen."

City Councilman Nick J. Mosby also said Under Armour needs to open a manufacturing plant in Baltimore before he would support tax-increment-financing.

"Baltimore is a working class city without the work," he said. "All throughout this world there are Under Armour manufacturing plants. Why is there is not one in Baltimore City?"

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Prominent activist DeRay Mckesson said there are too many unknown details about the subsidy.

"There's no way that any of us can support this right now," he said. "There are too many questions left to answer."

Sagamore Development, Plank's private real estate firm, estimates that infrastructure for the project would cost in excess of $1.1 billion. It plans to seek an added $574 million in federal and state funds to cover the cost.

The Baltimore Development Corp., the city's economic development agency, began reviewing Sagamore's request Wednesday. But city officials have not released many details about the deal.

Baltimore's $535 million would come from bonds sold by the city. Property taxes generated by the project would pay off the debt.

If it moves forward, the request would be the largest tax-increment financing, or TIF, deal in Baltimore history and among the largest in the country.

"It can create economic development," said engineer Calvin Young III, who wants to require local hiring as part of the deal. "I would want to say that 75 percent of people who are working on that are people who live in the city."

Former bank operations manager Patrick Gutierrez said he believes the TIF needs a haircut.

"It shouldn't give away $535 million," he said of city government. "There's a deal to be had. ... We can't just give away the store to developers."

Lawyer Elizabeth Embry called the size of the TIF "astounding."

"Does it create jobs for local people? Does it bring enough wealth to the city?" she asked. "That's a really tough question. The city has done a really poor job pushing back."

Businessman David L. Warnock encouraged a "very, very close" study of the deal.

"We have been out-negotiated by these developers for years," he said. "We need somebody who can stand up for the city and truly negotiate on our behalf."

State Sen. Catherine E. Pugh also encouraged more evaluation.

"Cherry Hill is one of the largest unemployment areas of the city," she said. "We need to make sure that if we're talking 26,000 jobs, how many jobs are going to go to Cherry Hill?"

City officials say it is too early in the review process to share estimates of how much debt the city would be taking on. They said they expect to sell the bonds in several rounds over a number of years and would not approve something that would jeopardize the city's bond rating or capacity.

Port Covington is part of the city's Enterprise Zone, making any project eligible for property and income tax breaks.

Plank, who founded Under Armour and is its largest shareholder, has spent more than $100 million of his personal fortune to buy about 160 acres in Port Covington and 40 acres in nearby Westport.

The debate, which was sponsored by WEAA-FM, the AFRO newspaper and City Paper, also featured questions on policing, education and economic development.

poll published Thursday by The Baltimore Sun showed a statistical tie between Pugh and Dixon for the lead in the mayor's race. Warnock was in third, followed by Mosby, Embry and Stokes.

lbroadwater@baltsun.com

Twitter.com/lukebroadwater

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